65 Say Insurer Gave Them the Brushoff

PHOENIX (CN) – Sixty-five people say Dealers Assurance Co. refused to properly pay claims when their cars were stolen despite having a theft-protection “system.” One plaintiff says the insurer denied the claim because the plaintiff “could not produce the keys that were in the vehicle at the time it was stolen even though plaintiff’s motorcycle was stolen at gunpoint while he sat at a stoplight.”

All the plaintiffs bought recreational vehicles and were up-sold SportSafe, a theft protection “system” developed and administered by RKI, “a now-defunct company,” according to the complaint in Maricopa County Court. “SportSafe had two components,” the complaint states: “(1) a sticker stating that the vehicle is protected by the SportSafe Theft Protection Plan; and (2) insurance coverage that pays the owner a set amount in the even the vehicle is stolen.” Dealers Assurance “was a back-up insurer and guarantor that was obligated to fulfill RKI’s contractual obligations if RKI failed to honor its obligations,” according to the complaint. After the plaintiffs’ vehicles were stolen, sticker and all, they submitted claims to RKI. Since RKI did not have the money to pay, it “denied the claims by either rejecting the entire claim in bad faith … or wrongfully paying plaintiffs less than they were entitled to or in a manner inconsistent with its statutory obligations,” the complaint states. After RKI went out of business and the plaintiffs submitted claims to Dealers Assurance, they say, it failed to fully investigate the claims or adjust RKI claims that were inadequate. Plaintiffs seek damages for bad faith and breach of contract, and costs. (The complaint states that “Plaintiffs are all purchasers of recreational vehicles,” and in the next paragraph refers to the plaintiff whose motorcycle was stolen, and whose claim was denied. The apparent discrepancy is not clarified.) The plaintiffs are represented by Robert B. Carey with Hagens, Berman, Sobol and Shapiro.